1. The Need for Mutual Forbearance
  2. Liberalism Starts with the Individual
  3. Restoring Liberalism
  4. Be a Fox, Not a Hedgehog
  5. Too Much of a Good Thing
  6. A Matter of Trust
  7. What We Share
  8. Liberalism and Markets
  9. Social and Political Trust
  10. Shaking Hands and Building Relationships
  11. Confident Pluralism
  12. Defending the Constitution of Knowledge
  13. Reaching Our Potential as a Liberal Society
  14. Remixed Religion in America
  15. Speaking Freely in American Universities
  16. Human Beings, Together and Alone
  17. Humility, Empathy and Asking the Big Questions
  18. Myths of American Identity
  19. The Democratic Dilemma
  20. Empathy, Dialogue and Building Bridges
  21. Conspiracy Theories in Contemporary Political Discourse
  22. The Psychology of Progress
  23. Classical Liberalism and Racial Justice
  24. Racial Classification in America
  25. Religion, Liberalism and Equality
  26. Toward Racelessness
  27. Having the Tough Conversations
  28. Cultivating an Ethos of Tempered Liberalism
  29. From High Conflict to Good Conflict


In this eighth installment of a series on liberalism, Benjamin Klutsey, the director of academic outreach at the Mercatus Center at George Mason University, speaks with Virgil Storr about the role of markets in a liberal society, including their effects on economic prosperity and moral behavior. Storr is the vice president of Academic and Student Programs at the Mercatus Center at George Mason University, the Don C. Lavoie Senior Fellow in the F. A. Hayek Program in Philosophy, Politics and Economics at the Mercatus Center and an associate professor of economics at George Mason University. He is also a senior fellow for the Study or Liberalism and Free Society at the Institute for Humane Studies. He has authored or co-authored several books, including Understanding the Culture of Markets (2012), Community Revival in the Wake of Disaster: Lessons in Local Entrepreneurship (with Stefanie Haeffele-Balch and Laura E. Grube, 2015) and Do Markets Corrupt Our Morals? (with Ginny Seung Choi, 2019).

This series also includes interviews with Alan Charles KorsEmily Chamlee-WrightIlana RedstoneRichard EbelingRobert Talisse Danielle Allen, Roger Berkowitz, Kevin Vallier, Juliana Schroeder, John Inazu, Jonathan Rauch and Peter Boettke.

BENJAMIN KLUTSEY: In this episode, our conversation will focus on bottom-up approaches that facilitate social trust and other factors necessary for building and sustaining a liberal society. One important bottom-up approach is the market mechanism. We’ll discuss whether markets help advance liberal values such as toleration, mutual forbearance, equality, pluralism and perhaps civic friendships.

My guest today is Professor Virgil Storr. His research and writings cover a wide array of topics, including entrepreneurship, economic culture, the economics of sociology and disaster recovery. Thank you very much, Professor Storr, for joining us today.

VIRGIL STORR: Thank you for having me.

What Is a Market?

KLUTSEY: We will be talking about the role of markets in a liberal society, but first, let’s get the definitions out of the way. What are markets? Is it a physical space where people buy and sell, or is it a concept? And just as a quick sub-question to that, how are they bottom-up solutions?

STORR: I think you can think of markets in two ways. You can think of them as social meeting spaces, and you can think of them as the kind of social orders that result from the interactions that take place in certain kinds of places. Let me be more precise. You can think of markets as spaces, social meetings where buying and selling is happening, where cooperation and competition is taking place. These can be physical spaces. You can think of something like, say, Main Street in a U.S. city, or High Street in the U.K., or a shopping mall, or the stock market, or the flea market in Florida, or an open-air market in Ghana, or a straw market in the Bahamas. So they could be physical.

They can also be virtual spaces, though. You can think of something like eBay, which is a virtual marketplace, or Amazon.com that’s become a marketplace, or Etsy that’s a marketplace. Also, as hinted at in your question, they can be conceptual spaces. You can think of something like, say, the market for cars or the housing market, for instance. In addition to being thought of in this way, as kind of these social meeting, markets can also describe the social order that results when buying and selling or cooperation, competition take place in particular kinds of spaces. In this way, they are emergent phenomena brought about by the bottom-up efforts of individuals trying to meet particular needs and trying to solve particular problems and challenges.

For instance, Doron, the owner of my favorite bakery in D.C., thought that D.C. needed a vegan bakery. In opening up that bakery, she was trying to solve a particular problem, meet a particular challenge. I need to occasionally—actually, more frequently than I would like to admit—satisfy my sweet tooth. The market for baked goods can also be thought of as what emerges out of our interactions and the kinds of interactions of, not just she and I, but others in D.C. who engage in similar kinds of efforts.

KLUTSEY: It seems to me that there are a few things that make markets possible: individual autonomy, property rights and some kind of institutional framework that facilitates the ethic and social trust necessary for people to exchange and contract—the rule of law being the key part of this, which extends to the norms that people actually observe. Now, if we introduce a little bit of each of these elements, do we see people become materially better off as a result?

Do Markets Make People Better Off?

STORR: As you suggest, markets depend on things like property rights and contract enforcement and the rule of law. As your question I think also implies, the link between these institutions and, say, material well-being—people being better off, at least monetarily—is pretty robust. That link has been well established, and even the harshest critics of markets probably don’t argue that point, that markets are connected to wealth.

It does appear that, at least from the work I’ve done, that introducing even a little bit of these does promote material betterment. In the book with Ginny [Choi] that I know we’re supposed to talk about a little bit later, we argue that people can improve their lives through markets. This is true even for the least advantaged of us, and this is true even when we just offer a little bit of market activity. It does seem to be the case that people are able to take advantage of even that little bit to improve their lives as a result.

KLUTSEY: In that book, Do Markets Corrupt our Morals?, there is a really interesting example that you use. You’re from the Bahamas, and you use an example from the colonial era where a slave, Boatswain, who is given a couple of days during the week to just go out and fend for himself and offer services to different people, is better off compared to others. Even in the worst of circumstances, when you introduce a little bit of these variables, it seems to change the dynamic a little bit, which I find very interesting.

STORR: Yes, that’s exactly right. That example when I came upon it was a really powerful example. But the experience of the Bahamas with slavery is actually a peculiar one that in some ways speaks to this point. Slavery was attempted in the Bahamas like it was everywhere else; there was an effort to grow cotton. It turned out that the land in the Bahamas couldn’t sustain cotton production at a particularly high level. And so, you had this challenge that slaveholders had, which was they had property and slaves but no way to make money off of it.

Rather than supply for the daily upkeep of their slaves, however base and minimum that was likely to be, what they decided to do was, “Rather than do that, we’re going to give people the right to farm particular plots of land and then grow their own stuff. Then we’ll give them the ability to participate in weekend markets. So on the weekend, we’ll let them trade if they had any surplus.”

As a result of this, you end up with Blacks in the Bahamas, even while slaves, being much better off than slaves elsewhere, and even being much better off than free people elsewhere. You’ve got life expectancy amongst Blacks in the Bahamas when they were slaves being comparable to life expectancies of people in Europe and significantly longer than the life expectancy of slaves in Jamaica or elsewhere.

You start a little bit of experience with markets, right? They get to grow their own stuff on their own. They have use rights over a part of the plantation. They get to grow whatever crops they can grow in that period. They get to trade whatever surplus they might have. And through that little experience with markets, they manage to improve their lives in the midst of what is otherwise a horrible situation. This little bit of markets seems to be powerful in helping people to be better off.

KLUTSEY: Yeah, I find that really fascinating. What then is the link between markets and a liberal society? Is it that the elements that are within a market system are the same elements that foster a liberal society?

STORR: I think those institutions—private property, individual autonomy—that you were mentioning are important for a liberal society, but I think a liberal society requires—I guess what I want to say is, I think a liberal society requires more than robust markets. I think liberalism requires more than just those institutions. It requires those institutions, but it requires more than that. Liberalism has a lot to do with our relationship to government. I think it describes certain commitments actually, like the commitment to openness or a commitment to cosmopolitanism or a commitment to tolerance. Markets can cultivate some of these values, but liberalism needs more than markets.

The Moral Debate About Markets

KLUTSEY: That’s interesting. We’ll come back to that, but I wanted to first go back to your book, the book that you and Professor Ginny Choi co-authored, Do Markets Corrupt our Morals? It’s a defense of markets, and I’m wondering, what was the motivation behind this effort to defend the market? Because you walk readers through a series of defenses and claim that those defenses are minimalist and, in some sense, they’re inadequate. What do you take to be the adequate defense of markets?

STORR: I’m going to hesitate to do this, but I think I’m going to push back on your premise a little bit because we actually don’t view the book as a defense of markets. At least, that’s not the book we set out to write. I’m not sure, even with it existing, that that’s the book we actually did write. The book, as we saw it at least, asks the question people have been asking for a long time, for as long as there have been markets—a question that has been mostly asked by philosophers. Then it tries to say, okay, if a social scientist were to answer this question, what could social science tell us?

The reason the book spent so much time laying out the way people have tried to defend markets on moral grounds and the way people have been critical of markets on moral grounds is basically to highlight a peculiarity in the discussion about the morality of markets that we observed. You’ve got this strange thing that happens where the people who ask that question answer that markets do corrupt us. They make a bold accusation. They say markets are morally corrupting. Engaging in market activity makes us worse people, essentially.

Then, interestingly, the people who supposedly disagree with them, the people who say they’re defending markets, almost never directly respond to the charge. So we found that peculiar that you have this question that’s been asked, and it’s an important question because if it is the case that markets are morally corrupting, that creates a challenge for us, particularly if we’re in a world where we depend on markets for our well-being.

They’re asking an important question; they come to a conclusion, the critics of markets. They say markets are morally corrupting. The people who would supposedly defend markets don’t actually respond to the critics and don’t actually even attempt to offer an answer to that question at all. So we saw ourselves as trying to really make sense of that debate and trying to push the conversation ahead in some ways.

What we think we’re adding to the conversation is that we’re saying, “What are the most compelling theories about how markets actually can work? Tell us about this question, about how markets are going to be morally corrupting. What is the most compelling evidence that we can find about how markets have worked? Tell us about whether or not markets are morally corrupting.” That’s what we see ourselves as doing, more so than setting out to defend or not defend markets on those terms.

KLUTSEY: Right. That’s an interesting point. It seems to me that those who are defenders of markets claim that markets are amoral. Then they sort of sidestep that question at all, whether markets are moral or immoral. You guys take it a step further in trying to answer that question, which was really good to see. These negative attitudes, thinking about the critiques—and there are some interesting ways that they’ve characterized markets or capitalism: vampire capitalism or a zombie system, and so on—I’d be curious to get your thoughts on where these negative attitudes come from.

It’s been going on for a very, very long time, but what generates this negative attitude towards markets despite the material and social benefits—health, wealth, happiness, stronger communities? Now, we find that younger people are becoming more comfortable moving further away from market solutions to problems. What are your thoughts on this?

STORR: I’ve puzzled about this a long time, and I don’t know that I have a great answer. [Joseph] Schumpeter says, essentially, we’ve forgotten basically how markets work. We’ve taken the prosperity that markets have given us for granted. Now we’re hyperfocused on the problems, essentially. Because the benefits are so diffuse and are difficult to really understand in some ways, we don’t know that by criticizing markets, by maybe trying to eliminate markets, we might be killing the goose that lays the golden egg. That’s the kind of view.

I don’t know for sure. I’m not sure that people really have negative attitudes towards markets per se. I think that there’s a dissatisfaction maybe, or even an increased dissatisfaction that we see now. When you look at surveys, people seem to be more sympathetic to eliminating markets, for instance, or eliminating capitalism, whatever. But I think that dissatisfaction is really with the existing economic system, and those are different things.

I think it’s a dissatisfaction in a lot of ways with cronyism. It’s a dissatisfaction with a system that allows people to keep profits when they succeed but bails them out when they fail. It’s a dissatisfaction with privilege. It’s actually also a dissatisfaction with government—a sense that government isn’t working for us, or a sense that politicians can be bought and paid for. That’s different than saying that there’s a negative attitude towards buying and selling, or towards getting a job where they’re paid for their efforts and their creativity, or towards starting a business, or towards becoming successful or even wealthy. I think those are different sorts of things.

There’s a very real dissatisfaction with the current economic order, but there are a lot of problems with the current economic order, so I don’t know that that dissatisfaction isn’t warranted. I don’t know that people get annoyed about their interactions with their barista at Starbucks. I don’t know that that’s really what’s going on, and so I don’t know that there’s really a negative attitude towards markets per se.

Markets and Inequality

KLUTSEY: I had a question about inequality because I think that oftentimes when I hear people lament about the economic system that we have, one of the points that they bring up is that there’s a growing inequality between the very wealthiest and those at the bottom. Is this a feature of the market system? Because I think that tends to be something that really bothers a lot of people who are observing.

STORR: I think inequality is a natural, inevitable feature of not only markets but of life. My wife, Nona, whom you’ve met, is smarter than me. She’s more attractive than me. She’s more fit than me. Our marriage is rife with inequalities.

KLUTSEY: You married up.

STORR: I did. I was very lucky. I’m benefiting from the inequalities in a lot of ways. Certainly in a market society, though, some people will have more and others will have less. It turns out, though, that when you look at the evidence, inequality is way worse in nonmarket societies than it is in market societies, and for a lot of reasons. One, it’s much better to be poor in a market society than in a nonmarket society. The poorest in market societies are better off than the poorest in nonmarket societies.

In fact, the poorest in some market societies—like, say, the U.S.—are much better than the richest in some nonmarket societies. You can name a number of nonmarket, less-developed countries. Even if inequality in the U.S. is as bad as they say, it’s not the social problem that people seem to think it is because it’s better to be poor here than it is to be poor anywhere else. That’s one reason.

Another reason, though, is that it turns out market societies are more mobile than nonmarket societies. In market societies, the rich become poor and the poor can become rich. That’s a feature of market societies. That kind of mobility is less prevalent and less present in nonmarket societies. Again, even if inequality was a problem that was as bad as people thought it was in market societies, the social costs associated with that, the social concerns associated with that, are mitigated by the fact that in market societies the rich can become poor and the poor can become rich.

But it turns out that when you look at the evidence, that economic inequality is actually worse in nonmarket societies. You look at things like Gini coefficients that measure the gap between the rich and the poor in various countries, and nonmarket societies are much more unequal. That said, I think that’d be my first pushback. I do think people are annoyed with inequality, but mostly—and this goes back to my earlier question—I think that they’re annoyed when they believe that the people on the top didn’t get there by their own efforts. They didn’t really earn what they have. And they believe that the poorest amongst us are all artificially kept down.

I know that it gets expressed as an anger about inequality, but I really think when you examine it, when you unpack it, it’s really a concern about legitimacy. It’s maybe a concern about transparency. Most of us, most people are okay with LeBron James being a millionaire. In fact, many will say that he’s probably underpaid, that LeBron James isn’t rich enough, given his talents and what he’s managed to accomplish. We’re less comfortable with the CEO who led a company into bankruptcy getting the golden parachute.

We’re not comfortable with the wealthy buying privilege or political access, but that’s not a concern with inequality per se. That’s a concern with the legitimacy of the process that generated the wealth in the first place, or a concern about how transparent our systems are and the capacity and ability of people to take advantage of the opportunities for rent-seeking and cronyism and privilege. That’s a different sort of thing, to my mind, and I think that’s much more what’s behind when people decry inequality.

KLUTSEY: This also goes back to your earlier point. How much of this is just a misunderstanding of terms, then? You point out the importance of storytelling and ethics in your work. How do we use better rhetoric to change this misunderstanding, if you have any thoughts on that?

STORR: I don’t know that it’s rhetoric as much as it’s inconsistency. Let’s say you claim to be a liberal; you claim to be pro-market, and then you’re not as hard as you maybe should be on cronyism. I think people observe that and they go, “Well, maybe you’re not really a liberal.” But they also go, “Well, maybe this system, this market thing that you’re defending, isn’t really this beautiful space that you’re talking about. Maybe it’s something that is corrupt in the ways that we obviously see this cronyism is corrupt.”

I don’t know that that’s a rhetorical problem. I think it’s a consistency of applying one’s ideals. If someone’s going to defend markets, that means you defend the markets against people who would use regulation to stifle markets, but you also defend markets against people who would use government to give them unfair advantages in markets. If you do one and not the other, then I think it makes it really hard for people to disentangle, on the one hand, what the market system is, and what it delivers and what it does, from the instantiations of the market system that they see that are rife with privilege and cronyism and all these other things.

Markets and Civil Society

KLUTSEY: Really interesting. This is a quote from your book, and I’m referring to Do Markets Corrupt Our Morals? It says, “Our market relationships can develop into meaningful social relationships that can sometimes become deeper than our familial connections. Our market activities also bring us into fellowship with people across the globe and across ethnicities and nationalities that we might not otherwise encounter. The market thus makes it possible for diverse individuals to peacefully reconcile their plans, and so, create favorable conditions for feelings of friendship.”

This is really interesting because we’ve been talking a lot about how we engage in civil discourse and how we foster civic friendships and relationships. Can you walk us through how markets do this?

STORR: Yes. This is an observation we make in our book, but it’s not one that’s unique to us. It’s a feature of markets that has been recognized for a long time. Adam Smith talks about how people working in the same trade, because of their consistent interactions with one another in that trade, can develop feelings of friendship that can mirror brotherhoods. He made that observation.

I think it comes down to the fact that we’re social beings. One of the things that markets do is they bring people together. Markets throw people—often with similar backgrounds, similar skills—in spaces where they work with one another, and because we’re social beings, that frequent interaction often develops into more than just a commercial relationship. [Mark] Granovetter talks about our interactions in the market becoming overlaid with social content.

Just think about buying a house. If you’ve bought a house, you know you end up spending a ton of time with your realtor, not just talking about the houses that you might want or not, but you end up having exchanges about your family and your goals and your plans for the future, and those lead into conversations about his or her family and her goals and her future. That social aspect is a natural consequence of the underlying market interactions. I think that’s the way that markets have been and can be social spaces.

KLUTSEY: That’s interesting. As I read Tyler Cowen’s book The Complacent Class, and also recently Robert Talisse’s book Overdoing Democracy, they both talk about this phenomenon of sorting, whereby we’re increasingly putting ourselves into geographical spaces and virtual groups, and putting ourselves into places that we’re very comfortable with, which is good. The market provides opportunities for us to match ourselves in ways that we prefer.

At the same time, we’ve also become more segregated and more polarized as a result, whereby we consider those who are not part of our groups negatively sometimes. Is this just part of human nature? Is this something the market system fosters? Or is it just that we are tribal as individuals and as people, and this is just one of the things that results from that?

STORR: Have we become more segregated and polarized? I guess I think just the opposite. As segregated and polarized as we are today, could we be less segregated and polarized than we were 50 years ago, 200 years ago—pick your time period? Of course, we’re sorting ourselves geographically and virtually into groups that we’re more comfortable with, and human nature maybe is to be comfortable with people who look like us and think like us and like the same things. I think that’s a part of human nature. I think that’s probably always been true.

But one of the things I think is underappreciated about the social changes that have accompanied the spread of markets and the growth of markets is that they’ve changed what we mean when we say someone looks like us or thinks like us or likes the same things as us. That used to mean—50 years ago, 200 years ago, what have you—that used to mean that the person is from my family or maybe from my village or maybe shares the same religion or race.

Now that means something entirely different. Now that means people who are fans of the Lakers or people who like Star Wars or people who listen to Beyoncé or people who studied sociology in college or people who listen to this podcast. These groupings cut against and cut across racial and ethnic and national, religious and even political lines. And these groupings aren’t rigid. That’s a different kind of segregation and polarization than the kind that we were worried about in the past. It’s a kind of sorting that’s less parochial and less problematic.

Markets Make Us Moral

KLUTSEY: Yeah. In fact, in Robert Talisse’s book, he talks about how negative attitudes towards interparty marriages are much higher now than interracial or interfaith or what have you, which is really interesting and does go to your point. Now, contrary to market critics, you maintain that the markets are moral spaces and that markets do make us moral. Can you elaborate on this? How do markets make us moral?

STORR: In our book, Ginny and I, as you say, find that people in market societies will tend to be more moral. By that we mean more altruistic, less materialistic, less corrupt, more likely to be cosmopolitan, more likely to be tolerant of others. That’s what we mean by that, as well as more trusting and more trustworthy. So we have a particular kind of conception of morality that’s going on there, and we find that market societies are positively associated with measures of morality along those margins.

Then the question is, what causes market societies to outperform nonmarket societies on these measures of morality? We argue that there’s two features of markets that allow them to act as moral training grounds in this way. The first is that market interactions are opportunities to learn about others, and so every trade—every single trade—is an opportunity to cheat. It’s an opportunity for the person selling the good to lie about the thing that they’re selling you and trick you into overpaying for something that they’re trying to deliver. It’s an opportunity for the person paying for the good to promise to pay but to not really pay. Every single market transaction gives us that opportunity.

When a market interaction goes through, when it’s successful, we learn something about the person we’re dealing with. If they cheat us, we learn that they’re a cheat. If they don’t cheat us, we learn that, well, at least in this interaction, they’ve been an honest broker. If we have multiple interactions with them, we might learn that, actually, I know something about this person’s character because given their ability to cheat me multiple times, they didn’t, so I know something about you now.

The same is true in working with someone. If you’re in an office space with someone, or you’re in a factory with someone, you know, well, this is the kind of person that’s lazy, or this is the kind of person that shirks. This is the kind of person when they’re stressed, they’re mean to their fellows. Or, this is the kind of person that handles stress in a way that I find appealing, or what have you. You learn that this is the kind of person with integrity or not. So markets in a lot of ways reveal our moral characters. To the extent that we want to be associated with good people and don’t want to be associated with bad people, markets give us an opportunity to sort those kinds of people out. That’s one way that markets act as moral training grounds.

The other way that markets act as moral training grounds is that they not only reveal character, but they give us an opportunity to reward people who behave in ways that we morally approve of and to punish people who behave in ways that we disapprove of. So the trustworthy mechanic earns a premium. We’re willing to go to them even though they cost a little bit more. The trustworthy contractor earns a premium. We’re willing to pay the trustworthy contractor more than we’re willing to pay the one that cheated us or the one that cheated our friend or the one that, based on the Yelp reviews, seems to have cheated multiple people. The conscientious babysitter makes more money.

Markets give us the ability to reward good behavior, and so markets incentivize good behavior. Because human beings are actually pretty good at detecting whether or not somebody’s being fraudulently nice or is genuinely nice, it actually over time trains us into being nicer people. I think those are the two ways that markets act as moral training grounds, and that that’s why we think at least you observe market societies outperforming nonmarket societies when you look at these measures of morality.

Restricting Markets Has Moral Consequences

KLUTSEY: Now, given the level of polarization that we see in our society—and we talked about this earlier, that they’re not necessarily along certain lines that they were before, but now it’s between parties and things like that—what are your thoughts on how we might leverage markets to help us to depolarize?

STORR: One of the implications of the argument that, perhaps, I’ve been making and that Ginny and I make in the book is that when we limit markets, that has—and this part has always been recognized—that has economic consequences, right? But if we’re right that markets are spaces that promote morality, and a part of morality might be being more pluralistic or being more tolerant or being more cosmopolitan, then if what we’re saying is correct, limiting markets also has a moral consequence.

The greater the extent that markets are limited, the less likely that it’s going to allow for the cultivation of these kinds of positive virtues. If we’re correct that markets make us more tolerant, then limiting markets is actually cutting against pluralism, for instance. It’s actually pushing us to be more pluralistically simple, so that might not be the only way.

To stick with the implications of the book, one of the more natural implications would be to say, “Well, if we give markets more space and we limit markets less, if what we’re saying about markets promoting morality, including pluralism, is correct, then markets will likely cultivate those and give us spaces to cultivate those kinds of values.” I think that’s the way I would answer that kind of question.

KLUTSEY: Interesting, though, because I’m thinking that if we are to foster more pluralism, and there are people who think that the market is excessive in certain areas and that we ought to cut back, by accommodating those views, we will have to in a way limit the market. Hence, all the values and the morals that you’re talking about might be limited in some way. By fostering pluralism, we, in turn, might get less pluralism—that is, if part of pluralism means that we recalibrate and reduce how much of the market system we see in our lives.

STORR: Yeah. To put it in a sound bite, there are not just economic but moral consequences to restricting markets. We might decide that we want to pay those consequences, but we should be mindful of them as we go about thinking about doing that. We can leave for another time, another debate, whether or not pluralism in any way is consistent with limiting markets, if by markets what we mean is individuals making choices about how they interact with one another.

Why Study Markets?

KLUTSEY: Switching gears a little bit, what motivated you to study markets? What is it about your background or interests that got you into seeking to understand more about markets and how they are formulated?

STORR: There are two reasons, and they pushed at it from opposite directions. I won’t say the first, but the first one I’ll talk about—that I’m an economist by training, and I became an economist because I wanted to essentially understand why some people were poor. That was my motivation for becoming an economist. Then you take economics, and one of the things that you quickly discover is that the economics in the textbook and the way that economics talks about markets, they describe a market that doesn’t seem to exist, that’s unrecognizable to anybody who’s actually experienced markets.

They describe this cold, sterile, efficient space populated by hyperrational beings who are concerned only with maximizing utility, something like that. You look at that and you go, “I don’t know who these people are, and I don’t know what this space is.” One of the things that has led me to spend a lot of my career looking at markets is because I wanted to spend time trying to understand how it is that individuals actually experience markets, as opposed to this cold feature, discussion and model of a market that you see in economics.

That was one reason that made me interested in markets. The other reason is that there was this real disconnect between . . . How should I put this? When I was younger, I thought of markets as these amazing spaces where buying and selling took place and you could get what you wanted. That was awesome and that was cool, and I liked that about markets.

Then I went through this period where I read a lot of Marx and I was enamored with Marx, and he obviously had a really negative view of markets. Then I spent some time looking at critiques of Marxism and became convinced that his solution to the problem wasn’t viable. That created for me an intellectual dilemma, which is that it made it essential for me to try to understand how markets actually worked—if it was the kind of early view of markets as spaces where we get what we want, we get money at least, or the kind of Marxist view that markets are these spaces that are alienating and exploitative. Is that the true market? Or is the market something else? So that was the second reason that the market has become a central focus of my work.

KLUTSEY: So it came as a result of curiosity?

STORR: Yeah.

The Culture of Markets

KLUTSEY: Wonderful. You’ve done a lot of work on culture as well. I was wondering whether you’d like to reflect a little bit on the culture of markets, beyond what we’ve talked about.

STORR: I mentioned the more narrow reason that when economists do talk about the market, they talk about a market that’s unrecognizable. But one of the things that struck me as being true, particularly as somebody who moved from the Bahamas and started working in the United States, is how different markets are in different parts of the world. That difference to me often had less to do with there being different rules around the markets or different institutional structures governing the markets. Private property rules, all those kinds of features that are critical for markets exist in a lot of places in the world in more or less perfect ways.

Nonetheless, markets look very different. They have different sounds and colors. The people in those markets seem to be viewing different kinds of activities as being successful or speaking to their success, because as an entrepreneur, different kinds of practices as being legitimate or illegitimate, or different kinds of interactions as being important or unimportant, or different kinds of ceremonies around market interactions as being critical or not critical.

Those differences were striking to me, and, again, particularly as somebody who grew up in one place and then moved to another, those were very striking. I wanted to understand that difference and to make sense of that difference. I ended up in that work spending a lot of time with the work of Max Weber, who wrote what I think is both—it’s a flawed book about the culture of markets, but I think it’s also an important book about the culture of markets. It’s The Protestant Ethic and the Spirit of Capitalism.

He makes in there a particular observation that I think is critically important. It’s that there are a variety of—he calls it “capitalisms”—but, essentially, there are a variety of markets, and each market is animated by a particular spirit or set of spirits. There’s a particular kind of ethos or value system or culture that colors the different markets that we observe. My interest was motivated by that sort of experience, and then the approach that I’ve taken to looking at it has been very Weberian in that way. So, how do you look, how do you discover, how do you find the economic spirits that are actually animating economic life in particular places?

KLUTSEY: How do we distinguish between the right kind of culture around markets—I don’t know if right and wrong are the right terms to use, but the market culture that fosters prosperity—how do we distinguish those things if we’re studying the culture of markets across the board?

STORR: I’m actually very resistant and critical of talking in terms of the right culture or wrong culture. A lot of economists who talk about the relationship between culture and economy do speak in those kinds of terms. They talk as if there’s certain kinds of cultural tools that are useful for market life and there’s certain kinds that are not useful for market life or whatever, or there’s good and bad cultures. One economist actually describes cultures as being progress-prone or progress-resistant.

I don’t agree with that. The reason I don’t agree with that way of thinking is because I don’t think of culture as a tool. Culture doesn’t have this feature as a toolkit. It’s not this thing that we carry with us, and then when we need a particular cultural trait or something like that, we pull it out and use it, and the thing we pull out might be good or bad for the task at hand. That’s not the way culture works. That’s not the way that—it’s somebody you know well belonged to a certain culture, or he’s been enculturated into a certain culture. That’s not how it travels with us. It’s essentially ways that we see the world and ways that we make sense of the world.

In that vein, I don’t think it makes sense to talk about progress-prone and progress-resistant cultures. I think all cultures have aspects of them, I guess, that one might say seem to be progress-resistant and aspects that seem to promote creativity, innovation and whatever. I think all cultures have that capacity because all human beings have those capacities. What that looks like in particular places, though, is going to differ based on the cultures in those different places.

What culture speaks to isn’t the capacity of peoples being able to develop or not develop. What culture speaks to is the way, in some sense, development is going to look and the way they are going to think about that process and the way that they’re going to pursue that process and what have you. It’s less about what a culture can and can’t do. It’s much more about the way that people in a particular culture are going to approach that same thing versus the way people in another culture might approach that same thing, and trying to understand where that comes from.

KLUTSEY: We can analyze different cultures, but the thing that we ought not do is to compare them—good versus bad, that kind of thing.

STORR: Well, comparing them is fine. It’s scoring them that’s the problem. We shouldn’t try to total up the pro-market or the pro-democracy or the pro-whatever aspects of a culture, and total up the negative-market or negative-democracy or negative-whatever aspects of a culture, and then say, “This culture’s good,” or “This culture’s bad.” That doesn’t say you can’t compare, but it says you shouldn’t treat cultural analysis as if you’re checking boxes.

KLUTSEY: Great. Well, the question I tend to ask all my guests is this: Are you optimistic about the future of liberalism or not? Do you think we will see a wider embrace of a liberal order, or are you skeptical?

STORR: Am I optimistic? James Baldwin has this line that says that if you’re alive and you’re pessimistic, it means that you’ve made life an academic matter. So because I’m alive, I can’t do that, and so therefore, I can’t be pessimistic. James Buchanan, a Nobel laureate in economics whose work has been deeply influential on my work, said that when he looks at the past and where we’ve come from, he’s optimistic, but when he looks at the future, he’s more pessimistic. I certainly share his optimism when I look back at the past.

Just over three decades ago, there were Soviet-style economies in multiple countries around the globe. A decade ago, certain people couldn’t marry because of who they chose to love. Now the debate over markets isn’t a debate between communism and capitalism. It’s a debate over what kind of market society we want to live in. One with more taxes or less taxes? One with more welfare programs or less welfare programs? One with more regulation or less regulation?

But almost everybody, even the staunchest critics of markets, seems to embrace markets, so it’s a different kind of debate. That puts the question as, will we see a wider embrace of markets? Will we see a wider embrace of liberalism? I actually think—and this goes back to one of my earlier answers—I think it depends on whether or not liberals are consistent liberals or not. I actually think it depends—a lot more than we appreciate—on where liberals are on issues like immigration, gay rights, racial justice, women’s rights, civil discourse and criminal justice reform. I think it depends—a lot more than we appreciate—on where liberals are on things like “Build a wall” or Black Lives Matter or Me Too.

I think if liberals are truly cosmopolitan, then that will increase the likelihood that others will come to appreciate how important liberalism is to a vibrant, wealthy, cosmopolitan, free society. If we’re not consistent liberals, if we’re on the wrong side of these issues, then I think people will become suspicious and won’t embrace liberalism. My optimism, I guess, is conditional on how liberals define liberalism.

KLUTSEY: A conditional optimist. Thank you very much, Professor Storr. I really appreciate you taking the time to join us. Our listeners may not know this, but Virgil is a colleague of mine, someone I’ve known for a long time and I reach out to when I definitely need someone to consult with on very important matters. I appreciate you very much, Virgil. Thank you so much for joining us.

STORR: Thank you for having me, and thank you for that kind word.

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